Manufacturing employment since 1970

The last fifteen (15) to twenty (20) years has seen a dramatic decline in the number of manufacturing jobs in the United States. The Bush administration tends to write-off those losses as "productivity improvements". Others, concerned because so many products are now made overseas, blame it on Wal-Mart and the like.

Both have contributed to that decline. I have personally witnessed numerous cases of manufacturing productivity improvements eliminating jobs. Manufacturers do it to keep costs in line, especially if they are burdened with very high medical health care premiums they pay for their employees.

Example: A plastic garbage can is being molded at a small plastics factory in the midwest. The old machine could do just one (1) can at a time, with about a 2-minute cycle time. The operator would sit and wait for each can to be molded. The company invested in new machinery that can do multiple cans at one (1) time. The packagining function was moved to a location next to the machine, so the operator packs the cans while he is waiting for the next set of cans to be finished. No more wasted time.....the elimination of a couple jobs, with an increased output. This is happening all over the country.

I searched the internet for information on manufacturing jobs in metropolitan areas. Although I didn't find a chart, I did browse the HUD website and developed my own chart.

Los Angeles is the biggest manufacturing metro.....with 883,042 jobs. That is a decline from 1980 of 255,206 jobs. I thought that mumber significant in view of the number of people who moved to California in the last twenty (20) years. (Cuts in military production certainly had an impact in LA.)

Metro New York is second.....with 851,768. That is a decline of 699,867 since 1970. That is a huge decline! (Textiles in older factories, perhaps?)

Metro Chicago is third.....with 720,234. That is a decline of 280,008.

The city we all love to hate.....and a city I assumed (incorrectly) would have the largest manufacturing loss.....metro Detroit.....is fourth in manufacturing jobs.....with 488,341. Their decline since 1970 is 100,271.

Rounding out the top five (5) is Metro Dallas.....now with 371,126 manufacturing jobs. That is an INCREASE of 121,293 since 1970. I expected this to be an increase.

(Houston also had an INCREASE.....106,501, since 1970. (They are now rated at number 8.)

Minneapolis / St. Paul is a vibrant metro for manufacturing employment. They rank at number 10, with 272,044 jobs. Since 1970 they have INCREASED by 71,753.

A couple places that have always been associated with manufacturing.....

Pittsburgh.....now ranked number 21, with 148,020 jobs. Their decline since 1970 is 154,117, about a 50% loss. Incredible.

Cleveland.....now ranked number 15, with 196,254 jobs. Their decline since 1970 is 121,299, about a 38% loss. All is now quiet in the Valley of the Cuyahoga.

I think what those numbers reflect is the shifting of the country's manufacturing base to the non-union Sun Belt states. However, over the past 5 years, Texas has also been losing manufacturing jobs on a statewide basis:

(I help to produce those numbers for the state of Texas.) I suspect the same is true for other southern states. If you really want to see a dramatic decline, look at El Paso manufacturing. It has been hemorraging jobs (mostly textiles, but others as well) for about the last decade, as companies shift production to the maquiladoras across the border or to China.

This is all part of a gradual shift from a goods-based economy to a service-based one. We all hate to lose those jobs, but most of us like our cheap manufactured products.

Great information. You should post your complete chart (I am great at suggesting work for other people).

I wonder if we will see a decline in manufacturing associated pollution. I have thought that one reason Boston has fewer brownfield sites than other cities is that manufacturing crashed here in the first few decades of the 20th century when shoes, textiles and other industry moved out.

Part of this is due to the cost of benefits, with health care being the main driver. I work for a trucking company and it is cheaper to work our driver 57 hours a week than to work them less and hire another driver.

The last fifteen (15) to twenty (20) years has seen a dramatic decline in the number of manufacturing jobs in the United States. The Bush administration tends to write-off those losses as "productivity improvements". Others, concerned because so many products are now made overseas, blame it on Wal-Mart and the like.

Both have contributed to that decline. I have personally witnessed numerous cases of manufacturing productivity improvements eliminating jobs. Manufacturers do it to keep costs in line, especially if they are burdened with very high medical health care premiums they pay for their employees.

Example: A plastic garbage can is being molded at a small plastics factory in the midwest. The old machine could do just one (1) can at a time, with about a 2-minute cycle time. The operator would sit and wait for each can to be molded. The company invested in new machinery that can do multiple cans at one (1) time. The packagining function was moved to a location next to the machine, so the operator packs the cans while he is waiting for the next set of cans to be finished. No more wasted time.....the elimination of a couple jobs, with an increased output. This is happening all over the country.

Bear, that was pretty good. I would like to do something like that for the Ohio metros, comparing the situation across the state. What was your source again? The HUD website?

Great information. You should post your complete chart (I am great at suggesting work for other people).

I wonder if we will see a decline in manufacturing associated pollution. I have thought that one reason Boston has fewer brownfield sites than other cities is that manufacturing crashed here in the first few decades of the 20th century when shoes, textiles and other industry moved out.

Not a lot of consolation to people who lost their jobs, though.

Boston is at 7th on the list, with 292,931 manufacturing jobs, just ahead of Houston and just behind Philadelphia.

Manufacturing employment drop...

Besides the reason already given for drop in recorded manufacturing employment (more productive technology, rising non-wage (non-variable) costs, jobs moving aborad) - those two are linked, in any case. I would also offer:
> outsourcing of servoices (reasonable but not huge impact) if Ford cleans its own toilets, all the employees are down as 'manufacruing employees' if they subcontract it to a cleanign comapony they are now 'service jobs'.
> general drop in maufacturing as % of GDP (like agriculture before it) - a nig component.
One problem with industrial decline alarmism is that it misconceives the value chain of production. In an industrially developed economy (i.e. with advanced machinery) the actual making of stuff is not apritcularly more challenging than, saym getting it to tehc ustomner (distribution) or even, if much of consumption is 'non-vital' to ebgin with, convincing teh custoemr to buy it. Thus, the might of, say, Wal Mart is not incomaprable to teh (former) might of Us manufacturers. peopel find it hard to beleive, but when you think in tehse terms it helps:
there is aluminium ore (bauxite) in teh ground in Australia. How mcuh si taht worth to you, NOW? Nothing. Someone prospects for it and digs it otu ad poriocesses it. it's worth a bit more. Someone smelts the ingots and sheet stamps it into a tray. Worth a bit more but to YOU (say in the US) not worth that much. Now someone caries it over to the US, outs it into a store dow the raod from you and puts n ad in teh apper: cool cyburbia trays on sale, only 59.99. (Oh, i forgot, soemone figured out that cyburbia is cool and had the logo printed on teh trays, now worth more). Ypou go to tthe store but, darn, you ain't got 60 USd on youy, whip out mr. Visa and yes! the Tray is yours. All those steps added to how much you personally are willign to pay for the tray. Without ANY of those steps, you would nto eb the proud owner. hence, there is no hierarchy.

Rant over. the point: look nto to the number of XYZ jobs btu jsut toi the number of jobs and what they pay. Both ahve, ona verage, risen in urban areas (obviously not in ALL urban areas). Good news. Not too many 'coopers' aroud any more. Who cares?

Bear, that was pretty good. I would like to do something like that for the Ohio metros, comparing the situation across the state. What was your source again? The HUD website?

Just go to the US Census Website. Their economic census data section has great charts on population by industry for most census geographies, which would give you comparable data for every city. Right now you can only get 1997 data for most MSAs, but the 2002 data is coming out gradually.

A friend of mine, who sells printing machinery (silk screen machines, hot stamping machines, pad printing machines), was in my plant today to discuss some projects. He was telling me how much his business has changed in the last few years.

His biggest clients used to be automotive suppliers, especially those located in southeastern Michigan. Now he completely ignores that area and that business, because there are just no takers. Most of the decorating business those suppliers did is now off-shore (China, India, Singapore, etc.).

He is doing fine, because a lot of companies in his area (northern Ohio and northern Indiana) are converting a lot of older labor-intensive machinery to more modern automated functionality machinery. In fact, that's why I called him in. I am looking for an automatic silk screen printer to put in-line with another that I already have, significantly reducing labor at that operation.

Wm. Wrigley Jr. Company

We all know this company, perhaps for the gum we sometimes chew OR perhaps because of the name of the baseball park on Chicago's north side OR perhaps because of their neat office building in Chicago. Awhile back they purchased some of the brands from Kraft Foods, which expanded Wrigley's offerings.

Their products now include Altoids, Life Savers, Creme Savers, and the most-popular chewy candy in Asia, Sugus.

They have closed an older Chicago manufacturing facility and are phasing-out another, located on Chicago's south side. However, they are expanding their investment in Chicago, at their Global Innovation & Research Center.

Wrigley is committed to continual innovation and continuous improvement. They understand product life cycles and are determined, evident by their actions, to remain on top in their specific markets. Wrigley now enjoys 20% of their growth from new products.....up from 5% about twenty (20) years ago. They are a great example of a USA corporation that will use a combination of USA labor, off-shore labor, and USA know-how to remain competitive in a very-competitive world market.

To me the big problem with the decline in manufacturing jobs is that they were a great source of employment for some of the less skilled workers of society. Remember, about half of the population has a IQ below 100. These people need to have jobs that they are able to perform. It makes me shake my head everytime I hear someone say moving jobs overseas is good because all those workers can now be retrained to do (insert brain powered job here) or become independent business owners. Many people are barely able to deal with the complexities of modern society in their personal lives as it is. Like it or not, these people are going to continue to exist and must be dealt with. Trying to move our country to be all white collar high tech jobs just isn't going to work.

Not that I'm saying all manufacturing jobs are simple. They run the full spectrum but manufacturers were always good about being able to break complex jobs down into simplier parts that they could assign to just about anyone with some training. The ones that couldn't be broken down were filled by the more skilled and educated.

One would hope that increasing productivity through better processes and technology would result in those time savings being spread over the entire workforce so that in order to maintain production levels, the workweek would be decreased to something like 32 hours and everyone would get an extra day off. In reality it appears to be going in the opposite direction. This appears to be for various reasons including the high fixed cost of each employee making it more economical to perform 500 hours of work by having ten people work 50 hours/week (even with time and a half for overtime) than having fifteen people work 33.3 hours/week.

Not sure what solution there is but I doubt there will ever be enough service jobs to replace all of the manufacturing jobs that were performed by the less skilled in society. I also think that in general service jobs, especially public facing ones, require more skill and thought than the manufacturing jobs that have been moved or are no longer required due to technology.

I really do hate some of the solutions proposed. Intentionally decreasing productivity by removing automation or going to flawed processes just seems stupid.

As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron. - H.L. Mencken

Trying to move our country to be all white collar high tech jobs just isn't going to work.

Yeah, I was chortling over at another website when a gentleman piously intoned that we are becoming "independent professionals" with all kinds of skills and more money! LOL

Particularly as many, if not most, basic "white collar jobs" are even more easily moved overseas (see El Guapo's Indian tutor thread). Add in the fact that we have no more industrial base, and you eliminate a whole class of designers/engineers, managers, industrial engineers, etc. The Chinese and Indians and, at the upscale end, Europeans, don't need our white collar workers. We are in many respects the least educated anyway.

About twenty (20) miles north Toledo, in Dundee, MI, a new automobile parts plant is ready to start production. They will begin with something like four-hundred (400) employees and hope to double that number in a few years. The plant is operated by Daimler-Chrysler and another manufacturer (but I can't remember which one).

Their requirements to even be interviewed for one (1) of the factory jobs was a 2-year degree at the minimum.

Too many Americans rely on job numbers to judge the health of the US manufacturing sector. Output-based numbers are more important. The problem is many politicians, TV commentators, and union officials have convinced some Americans the manufacturing sector is in trouble - citing job losses and production shifts to other countries.

My point is the US manufacturing sector is actually very healthy and getting better. The purchasing managers' index, or PMI, is probably the most reliable measure of US manufacturing. Here's the latest from the Institute of Supply Management's September 2005 report. "The PMI indicates that the manufacturing economy grew in September for the 28th consecutive month."

This trend has been in place since the early 1980s. Look at the ISM Indexes chart measuring orders and production. A reading >50% shows the manufacturing economy is expanding - its going up, up, up! Meanwhile, the ISM Employment Index is going down. http://www.yardeni.com/pub/napm_c.pdf

Productivity improvements have enabled the manufacturing economy to expand while requiring less workers. I witnessed this first hand when I worked at a small Rhode Island chemical factory during my high school years. One employee turned into a complaining bitch - they fired her then automated her job. I drove by the factory recently and it expanded dramatically. I'm sure output there is expanding a lot faster than the payroll.

The Great Crew Challenge

Here's another problem that is just over the horizon and will soon plop right in front of USA manufacturing executives.....

It has been called "The Great Crew Challenge". It is a reference to the fact that 30% to 40% of the skilled workforce in USA factories will be retiring in the next 5 to 7 years.

Even with major productivity improvements, such as capital investment in labor-saving automation, these facts will create a real problem for our country. In many factories the "know how" is in the heads (and the fingers and hands) of the employees who will be retiring. Today's younger people see manufacturing as "a yuck".....they are more interested in high-paid (yeah, right ) computer-based jobs.

Companies that chose to ignore this upcoming issue will find themselves in trouble. That trouble could lead to all sorts of problems, including bankruptcy, poor product, low productivity, union organizing, high costs (to entice unskilled workers to come in the door), and out-sourcing.

If you have a teenage kid....encourage him or her to get into something like industrial engineering. Soon, those positions (and similar positions) will be very available and very well paid.